Builder got funds despite concerns

Glendale paid millions to ADI, a politically connected developer now accused of fraud.

December 29, 2010|By Jessica Garrison and Melanie Hicken and David Zahniser

Glendale's housing manager was blunt with his concerns about giving a prominent developer $12.2 million to build low-income housing near the city's downtown.

"I strongly recommend ... not funding this project at anywhere near the level currently being requested," Mike Fortney wrote in an April 2008 letter to his boss.

Glendale City Council members awarded the money anyway. The following year, they paid an additional $1.7 million for the project, dubbed Vassar City Lights, a five-story stucco building on San Fernando Road.


The beneficiary of that vote was Advanced Development and Investment Inc., a Los Angeles-based developer that for two decades prospered in part by carefully cultivating the political process. The company has built apartment complexes subsidized by public agencies across the state, including more than 40 in Chinatown, Echo Park and other Los Angeles neighborhoods.

Now, the firm faces allegations that it defrauded government agencies and may have built potentially unsafe housing for the poor. In recent years, ADI has repeatedly persuaded officials in Glendale, Los Angeles, Sacramento and elsewhere to hand over millions of dollars to complete its projects -- even after concerns were raised about cost or quality.

As its projects were being approved, ADI made tens of thousands of dollars in campaign contributions to California politicians. Far larger amounts -- more than $300,000 over the last decade, according to a Los Angeles Times analysis of campaign contribution records -- came, not directly from ADI, but from the little-known drywallers, electricians and other subcontractors retained by the company to construct its buildings.

ADI is currently the subject of a federal investigation in which at least three of its subcontractors have recently received subpoenas.

Four subcontractors told The Times that they were pressured to give to politicians and felt they risked losing future work with ADI if they said no.

"They pressured you hard," said Everett Freeman, owner of Freeman Lath and Plaster in Lancaster, who added that he severed his ties with ADI, in part out of frustration with their demands for campaign contributions.

Once Freeman Lath and Plaster received work from ADI, company officials made it clear that "they expected everyone to contribute" to chosen candidates, he said. "It was insinuated that basically if you didn't go along with their little program, you wouldn't get the work."

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